Corporate culture of small apparel retail firms in towns in the trading area of a regional shopping

148 Pages·2017·5.24 MB·English

by  Patricia Mary Kosters

Iowa State University Capstones, Theses and
Retrospective Theses and Dissertations
Dissertations
1991
Corporate culture of small apparel retail firms in
towns in the trading area of a regional shopping
center
Patricia Mary Kosters
Iowa State University
Follow this and additional works at:https://lib.dr.iastate.edu/rtd
Part of theEconomics Commons,Entrepreneurial and Small Business Operations Commons,
and theSociology of Culture Commons
Recommended Citation
Kosters, Patricia Mary, "Corporate culture of small apparel retail firms in towns in the trading area of a regional shopping center"
(1991).Retrospective Theses and Dissertations. 16821.
https://lib.dr.iastate.edu/rtd/16821
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Corporate culture
of small apparel retail firms
in towns in the trading area of a
regional shopping center
by
Patricia Mary Kosters
A Thesis Submitted to the
Graduate Faculty in Partial Fulfillment of the
Requirements for the Degree of
MASTER OF SCIENCE
Major: Textiles and Clothing
Signatures have been redacted for privacy
Iowa State University
Ames, Iowa
1991
Copyright~1991, Patricia Mary Kosters. All rights reserved.
ii
TABLE OF CONTENTS
Page
INTRODUCTION 1
Concept of Corporate Culture 1
Small Business in the United States 3
Small Business in the State of Iowa 4
Consumer Outs hopping 5
Purpose of Research 7
REVIEW OF LITERATURE 9
Retail Systems Theory and Organizational Structure 9
Retailing defined 9
Retail business theory 9
Retail organizational structure and management 11
Organizational and Corporate Culture 13
Context for investigating corporate culture 13
Definitions of corporate culture 15
Role of founder in development of culture 17
Central role of culture within the firm 18
Implications for managers and employees 19
Profiling and measuring corporate culture 21
Research Approach 27
Qualitative research in a field setting 27
Case studies 31
The long interview 35
METHOD 40
Case Study Protocol 40
iii
The sample 41
Data collection instruments 42
Procedure
43
Data Analysis 44
RESULTS AND DISCUSSION 47
General Description of Firms 47
Analysis of Cultural Dimensions 50
Communication patterns 50
Conflict tolerance 53
Direction 55
Identity 57
Individual initiative 62
Integration 64
Management support 66
Orientation to external publics 67
Firm image 72
Reward system 78
Risk tolerance 79
Miscellaneous 80
SUMMARY AND CONCLUSIONS 83
Overview of Research 83
Limitations of Research 85
Summary of Results 87
Implications for Further Research 90
REFERENCES
93
ACKNOWLEDGEMENTS 97
iv
APPENDIX A: MCKINSEY 7-S FRAMEWORK 98
APPENDIX B: SYNTHESIS OF CULTURAL DIMENSIONS 100
c:
APPENDIX INTERVIEW SCHEDULES 116
APPENDIX 0: PERSONAL DATA QUESTIONNAIRE FORMS 127
APPENDIX E: OBSERVATION SCHEDULE 130
APPENDIX F: CODING GUIDE 134
APPENDIX G: CONSENT FORM 137
APPENDIX H: HUMAN _SUBJECTS RESEARCH APPROVAL 139
1
INTRODUCTION
Concept of Corporate Culture
Each human group and organization has culture. Culture,
as applied to the business.organization, is often called
corporate culture and generally refers to a firm's system of
shared meanings and shared values. Luce (1984) quoted Brooke
Tunstall, an executive with AT&T Corporation, who defined
corporate culture as:
"a general constellation of beliefs, mores, customs,
value systems, behavioral norms, and ways of doing
business that are unique to each corporation, that set
a general pattern for corporate activities and actions,
and that describe the implicit and emergent patterns of
behavior and emotions characterizing life in the
organization. Taken together, the elements in the
culture encompass the very meaning of the
organization ••• " (p. 40).
This system of shared meanings is expressed in the behavior of
managers and employees as they carry out everyday activities
and respond to needs and problems faced by the business
organization. Shared values determine, to a large degree,
what managers and employees see as guidelines or principles,
written or implicit, for how they should behave and respond
within the organization.
Jelineck, Smircich, and Hirsch (1983) said that •••
"culture focuses our attention primarily on the processes and
artifacts of organization sense making" (p. 337). The role of
corporate culture in making sense or providing consistency of
meaning to the primary activity of a business organization is
pOinted out in the McKinsey 7-S Framework for management (see
2
Appendix A). Peters and Waterman (1982) developed the 7-5
Framework while working for McKinsey and Company, a business
consulting firm, in an attempt to expand their traditional
approaches to business problem solving. They concluded that,
although highly important, strategy and structure issues are
only a small part of the total issue of business management
effectiveness. Culture, expressed as shared values in the 7-5
is central to the business organization. Peters
Framewo~k,
and Waterman contended that the pervasive nature of corporate
values has impact on all functions and activity in the
organization at all levels.
While corporate cultures vary widely according to factors
such as company size, industry, strategy, and financial
performance, some cultural dimensions have been identified as
common to all business environments by Betts and Halfhill
(1985), Bookbinder (1984), Peters and Waterman (1982), and
Reynierse and Harker (1986). Cultural dimensions from
previous research were summarized by Robbins (1988) to include
1) individual initiative, 2) risk tolerance, 3) direction, 4)
integration, 5) management, 6) control, 7) identity, 8) reward
system, 9) conflict tolerance, and 10) communication patterns.
In addition, since these dimensions have been found to be
relatively stable, one can expect that the corporate culture
of a firm is not likely to change much over time. Robbins
contended that although no definitive method for measuring
corporate culture exists, preliminary research suggests that
3
by analyzing a business organization according to these ten
dimensions, a composite picture or profile of its corporate
culture can be formed.
Small Business in the United States
Most research in the area of corporate culture has
focused on large business organizations. However, significant
evidence indicates that it may be important to investigate
small business cultures. Schein (1983) suggested that because
business organizations do not form spontaneously but are
created when someone has an idea for a new enterprise, a
firm's founder simultaneously brings together a group of
people for the purpose of accomplishing some goal and, "by
force of his or her personality, begins to shape the
organization's culture" (p. 13). The fact that the founder
of the small company is often directly involved in almost all
business activities as both the owner and manager further
suggests that the small firm's culture will be significantly
influenced by those assumptions, values, and theories he or
she brings to it. In addition, according to Clifford and
Cavanagh (1985), all large corporations started as small
businesses and ••• "999 of every 1000 companies stay small" (p.
20).
The Small Business Administration defines small business
as independently owned and operated, not dominating its field
'of operation, employing no more than 500 persons, and having
4
yearly sales of less than $20 million (LaForge, Reese, &
Stanton, 1984). Robinson and Pearce (1984) reported that
small business firms dominate the United States' service,
construction, and retailing sectors, and that approximately
82% of all retailing outlets are sole proprietorships. Small
businesses comprise 97% of all business enterprises, employ
nearly 60% of the entire workforce, produce 45% of the Gross
National Product, and have generated 87% of the net new jobs
in the United States over the last ten years (Keats & Bracker,
1988).
Small Business in the State of Iowa
In the state of Iowa where approximately 90% of all
businesses have gross sales of less than $250,000 (Iowa Dept.
of Revenue, 1989) and employ an· average of less than 12
persons (Stone, 1989a), the significance of small business in
terms of employment and total state revenues is much greater
than for the country as a whole. Stone (1986) reported a
total of 175,109 businesses in Iowa of which 60% were retail
and service businesses. Approximately 2450 Iowa apparel
retail stores generated almost $2 billion in gross sales in
1989. In that same year 791 women's apparel stores alone
generated $226 million (Stone, 1989d).
Stone (1986) found that more than 60 Iowa counties
reported declines in sales tax revenues in the 1984 fiscal
year. He estimated that Iowa lost approximately 5,000 retail
5
and service businesses between 1983 and 1986. With over one-
half of Iowa's towns reporting populations of under 500, he
suggested that financial problems and failure of additional
•
businesses could be catastrophic for the main streets of many
small Iowa towns.
In a more recent study, Stone (1989c) found continued
decrease in total retail sales in small towns in Iowa over the
previous few years for retail firms in general and for apparel
retail firms in particular. By 1989 most towns under 2500
population could not support and did not have an apparel
retail business of any kind (Stone, 1989b). In his studies on
the impact of Wal-Mart stores, Stone (1989c) reported a loss
of approximately $290,000 in sales for apparel stores in the
towns where a Wal-Mart opened, even though there was an
increase in general merchandise sales for the towns as a whole
during the period studied. He concluded that the losses in
total sales in small towns in Iowa were partially due to
competition from Wal-Mart stores and partially due to
competition from larger cities as their large shopping centers
increasingly draw trade from small towns situated nearby.
Consumer Outs hopping
Consumer outs hopping has been described by LaForge,
Reese, and Stanton (1984) as consumers traveling to another
town to buy goods that are available in their own communities.
Outshopping has a particularly unfortunate effect on small